Bulls Storming the Beach

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We continue to see the market improve, as bulls have started off 2012 on a much different note than what we saw for much of last year. Each bit of intraday weakness is seen as a buying opportunity, and save two big opening gaps this year, most of the tape has been benign. More importantly, breakouts are largely being permitted to hold, which is in sharp contrast to the nasty reversals and head fakes in either direction we saw last year.

It also seems as though each day we are seeing beaten-down sectors start to set up. CLNE FSYS and WPRT, in the natural gas/alternative plays group, might be the next to go after the biotech’s, solars, and others have recently become hot. Many small caps and forgotten sectors that had been left for dead are suddenly not only showing signs of life, but are punishing shorts, showing no mercy. The Euro is also showing glimpses of life, though there is much work for bulls to be done there. Despite the overall weak chart of the Euro and Shanghai Composite, and the lack of a rollover in Treasuries, U.S. stocks have shrugged it all off and are essentially trading in their own world.

Generally speaking, the market tends to be healthier when it is not highly correlated to a given asset class or classes. While 2012 is just getting started, so far so good for the bulls. I will have more analysis on my recap after the bell…